How to plan through salary swings



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© Used with permission of / © Rogers Media Inc. 2017.
Click here to see more personal finance questions answered.

Q: My income fluctuates quite widely from year to year. How do I plan for this and how do I handle the tax implications of such income swings?

—David

A: Yours is the challenge of many a commissioned salesperson or business owner, David. The thought of a stable salary and defined benefit pension plan may be appealing to some, but others, like you – and me – prefer a little more control over destiny. That control doesn’t always mean stability, however.

For starters, I think everyone should have a reserve or emergency fund, particularly those whose jobs are riskier or whose income is variable. An emergency fund doesn’t necessarily mean having six months of expenses sitting in a savings account earning pennies in interest. It could mean a healthy TFSA balance that includes an allocation of conservative, liquid investments. It could mean a secured line of credit available with a low interest rate.

Ask a Planner: Leave your question for Jason Heath »

Having tens of thousands of dollars sitting idle for your whole life may be comforting, but it could usually be put to better use invested in an RRSP or TFSA or used to pay down debt.

So, the concept of an emergency fund, David, can

Article source: http://www.msn.com/en-ca/money/savingandinvesting/planning-through-salary-swings/ar-AAtGHem?srcref=rss

What does a university education cost in Canada?



UNI_REAL COST


© Used with permission of / © Rogers Media Inc. 2017.
UNI_REAL COST

University is expensive. Students get that, but how expensive, exactly?  When it comes to comparison shopping between schools, tuition is the easiest number to consider. But for many students—particularly those who move away from home—school fees are only a fraction of the overall price tag.

MORE: Create a custom university ranking based on what’s most important to you

To determine the real price of an education in Canada, Maclean’s undertook a first-ever survey of 23,384 undergraduate students to find out how they spend their money—and how they saved for an education. We found the average cost of a year of post-secondary education in Canada is $19,498.75. But for some students, the amount is significantly higher.

A University of Toronto student living off campus can expect to spend $23,485 each year, the highest average amount in our survey. Second on list was Ryerson at $23,066 followed by Saint Mary’s University in Halifax at $22,892. Meanwhile, students living at home and attending Sherbrooke had the lowest costs for an education, at just $4,284.

MORE: Ranking universities by the price tag for off-campus students  

In most cases, rent is a bigger expense, but there are other costs to consider: books, booze, extracurriculars and groceries. There are also bus or plane tickets to visit Mom and Dad. Some of these costs seem insignificant, but

Article source: http://www.msn.com/en-ca/money/careersandeducation/what-does-a-university-education-cost-in-canada/ar-AAtInMd?srcref=rss

No tax incentives for Amazon headquarters in Calgary

A day before Calgary submits its bid to lure tech giant Amazon to open new headquarters here, an official leading the effort said the city is not interested in “borrowing a company’s loyalty,” but will offer some sweeteners.

The Calgary bid will have no tax incentives — the city is limited by legislation on what it can offer — but the local bid committee won’t disclose whether it’s offering up real estate, according to Mary Moran, head of Calgary Economic Development.

More than 100 North American cities have mused about submitting bids to secure the economic windfall of having Amazon spend $5 billion and create up to 50,000 jobs for its second North American headquarters, dubbed HQ2. Bids are due Thursday.

“This kind of opportunity comes once in a lifetime,” Moran said, noting the bid has drawn support from more than 100 local businesses.

In its 200-page proposal, Calgary pitches the advantages of coming to Canada in general, including up to $600 million in annual savings from not having to pay private health-care premiums.

It also looks at Calgary’s own assets. In total, the bid suggests Amazon’s costs, such as labour, electricity and taxes, would be 14 per cent lower in Calgary than in Seattle, the home of the online retail giant, Moran said.

The city could also leverage funds from a community revitalization levy collected in a swath of east downtown, if Amazon was interested in moving its headquarters to the area.

Just as the city used the levy — which siphons a portion of property

Article source: http://www.msn.com/en-ca/money/topstories/calgary-offers-amazon-sweeteners-for-headquarters-but-no-tax-incentives/ar-AAtHoEb?srcref=rss

If NAFTA dies, does old Canada-U.S. FTA live?

© Getty

WASHINGTON – It’s a refrain frequently heard in Canada: That ending NAFTA wouldn’t change much in economic relations with the United States, because the countries could simply pull their older agreement off the shelf, dust it off, and persist in trade without tariffs.

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It’s also wrong, some analysts say.

A few people interviewed this week disputed the idea that the original Canada-U.S. Free Trade Agreement of 1987 would automatically snap back into place if NAFTA disappears, an increasingly relevant topic as hostilities mount in the trilateral trade talks.

“That’s so naive,” said Sarah Goldfeder, a former U.S. diplomat in Mexico and Canada who is following the trade negotiations at Earnscliffe Strategy Group in Ottawa, on the idea of an automatic snap-back.

“You’d have to re-implement (the original agreement).”

That would raise new challenges, she said. First of all, she said the current American political climate would not make for an easy re-implementation. She said there would be demands for a renegotiation within the U.S., and the parties would soon be back at the table struggling with many of the same sticking points.

“There’s no way this (Trump) administration would do this (re-implementation) without negotiating a new agreement,” she said.

“So you’re still going to have to negotiate all the same irritants.”

The current talks have become bogged down amid huge gaps between

Article source: http://www.msn.com/en-ca/money/topstories/if-nafta-dies-does-old-canada-us-fta-live/ar-AAtI2er?srcref=rss

Sears managers, execs will still pocket big cash bonuses

Sears Canada will pay a final $2.8 million in retention bonuses to 36 head office staff, even though the retailer’s restructuring efforts failed and the company is closing its doors.

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Promised bonuses were only supposed to be paid in full if the company found a way to survive. However, Sears got court approval on Wednesday to continue paying retention bonuses to key staff such as executives and managers who will now steer the retailer through the wind-down and liquidation process. 

In total, Sears will end up paying up to $6.5-million in bonus payments to head office staff from the time it filed for insolvency in June until it closes for good.

Meanwhile, more than 16,000 employees have recently lost or will soon lose their jobs without receiving any severance, and many of them will likely collect reduced pensions. 

Former Sears worker Mina Iannino at Ontario Superior Court, where Sears got permission to amend its retention bonus plan.© CBC
Former Sears worker Mina Iannino at Ontario Superior Court, where Sears got permission to amend its retention bonus plan.
Former Sears worker Jennifer Holder says the employee retention bonus plan 'baffles the mind.'© CBC
Former Sears worker Jennifer Holder says the employee retention bonus plan ‘baffles the mind.’

“Can I use the F-word?” said

Article source: http://www.msn.com/en-ca/money/topstories/sears-managers-execs-will-still-pocket-big-cash-bonuses-even-though-retailer-is-closing/ar-AAtIyoE?srcref=rss

This company’s robots are making everything—and reshaping the world

Fanuc Corp's biggest robot 'M-2000iA/2300' is seen at the 28th Japan International Machine Tool Fair in Tokyo, Japan, November 17, 2016.© REUTERS/Toru Hanai
Fanuc Corp’s biggest robot ‘M-2000iA/2300’ is seen at the 28th Japan International Machine Tool Fair in Tokyo, Japan, November 17, 2016.

(Bloomberg Businessweek) — The headquarters of Fanuc sit in the shadow of Mt. Fuji, on a sprawling, secluded campus of 22 windowless factories and dozens of office buildings. The grounds approach the lower slopes of Japan’s most famous peak, encircled by a dense forest that Fanuc’s founding CEO, Seiuemon Inaba, planted decades ago to shield the company’s operations from prying eyes—an example of the preoccupation with secrecy that once led Fortune to compare him to a bond villain.

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Since taking over as chairman and chief executive officer in 2003, Inaba’s son, Yoshiharu, has continued the tradition of privacy. He takes questions from investors only twice a year, wearing a blazer in the lemon yellow the company uses to brand the factory automation robots it produces, the factories its robots work in, its employees’ uniforms, and the company cars that shuttle engineers and executives around the neighboring village of Oshino.

The elder Inaba once explained this uncharacteristically loud touch by calling yellow “the emperor’s color.” It also helps security guards quickly

Article source: http://www.msn.com/en-ca/money/companies/this-company%E2%80%99s-robots-are-making-everything%E2%80%94and-reshaping-the-world/ar-AAtFEl0?srcref=rss

Liberals to change passive-income plan

OTTAWA – The federal government is moving to pare down its controversial tax proposal on passive income so that it will only affect three per cent of private corporations.

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Finance Minister Bill Morneau will be in New Brunswick on Wednesday to unveil changes to his passive investment proposal so that it only targets unfair tax advantages used by the wealthy, a senior government official told The Canadian Press.

The official, speaking on condition of anonymity ahead of the announcement, said Morneau will also share updated estimates showing there’s between $200 billion and $300 billion in assets sitting in the passive investment accounts of just two per cent of all private corporations.

The finance minister will also point out that the dollar figure has been growing by $16 billion per year as wealthy incorporated individuals reap what the official described as unlimited benefits from tax-advantaged savings accounts over and above RRSPs and TFSAs, the official said.

The government wants to prevent all of this cash, which it contends is not being reinvested into the businesses or the economy, from piling up in these savings portfolios over generations, the official added.

The tweak to Morneau’s original proposal comes after an onslaught of complaints that warned cracking down on passive investments could adversely affect middle-class entrepreneurs who use their companies to save for economic downturns, sick leaves and parental leaves.

Morneau will provide more details

Article source: http://www.msn.com/en-ca/money/topstories/liberals-to-change-passive-income-plan/ar-AAtEuWr?srcref=rss

Trump’s fortune drops by $600 million to $3.1 billion


What the new mortgage rules mean for homebuyers

mortgage math© Used with permission of / © Rogers Media Inc. 2017.
mortgage math

Today, the Office of the Superintendent of Financial Institutions (OSFI) introduced new rules on mortgage lending to take effect next year.

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OSFI is setting a new minimum qualifying rate, or “stress test,” for uninsured mortgages (mortgage consumers with down payments 20% or greater than their home price).

The rules now require the minimum qualifying rate for uninsured mortgages to be the greater of the five-year benchmark rate published by the Bank of Canada (presently 4.89%) or 200 basis points above the mortgage holder’s contractual mortgage rate. “The main effect will be felt by first-time buyers,” says James Laird, co-founder of Ratehub.ca. “No matter how much money they put down as a down payment, they will have to pass the stress test.” The effect of the changes will be huge, resulting in a 20% decrease in affordability, meaning a first-time homebuyer will be able to buy 20% less house, explains Laird.

MoneySense asked Ratehub.ca to run the numbers on two likely scenarios and find out what it would mean for a family’s bottom line. Here’s what they found:

SCENARIO 1: Bank of Canada five-year benchmark qualifying rate

In this case, the family’s mortgage rate, plus 200 basis points, is less than the Bank

Article source: http://www.msn.com/en-ca/money/topstories/what-the-new-mortgage-rules-mean-for-homebuyers/ar-AAtEyxE?srcref=rss

NAFTA’s potential end is a wake-up call for Canada

Some of the most vibrant agri-food economies in the world have been proactively engaged on the global stage in order to give their agri-food sector a sense of purpose, writes Sylvain Charlebois. Meanwhile, as the rest of the world progresses, we continue to support cartel-esque agencies to support commodity groups like dairy, eggs, poultry, maple syrup and many other sectors.© Jacques Boissinot
“Some of the most vibrant agri-food economies in the world have been proactively engaged on the global stage in order to give their agri-food sector a sense of purpose,” writes Sylvain Charlebois. “Meanwhile, as the rest of the world progresses, we continue to support cartel-esque agencies to support commodity groups like dairy, eggs, poultry, maple syrup and many other sectors.”

Editor’s note: The opinions in this article are the author’s, as published by our content partner, and do not represent the views of MSN or Microsoft.

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Despite Canada’s optimism, NAFTA talks seem to be heading nowhere. Wanting to push back on Mexico’s influence over the American economy, Washington is now indicating that the bilateral option with Canada is more appealing.

In Donald Trump’s playbook, multilateral deals are highly complex and can only benefit smaller markets to a greater degree. Bilateral deals are perceived as being more predictable, as they make it easier to

Article source: http://www.msn.com/en-ca/money/topstories/nafta%E2%80%99s-potential-end-is-a-wake-up-call-for-canada/ar-AAtEwhg?srcref=rss